Agricultural Commodities For Third World Consumers, Higher Food Prices and Increasing Western Demand
Comments and Opinions
Nelson - For third world consumers, higher prices for agricultural commodities like coconut or quinoa are bad, but for farmers in developing countries, surely higher prices and export markets for their produce is a major benefit? In many countries the supply chain for fruit and vegetables is poor and a lot of produce is wasted - in Indonesia a grower recently complained to me that the price of guava was so low it wasn't worth taking it to the market - he and his family ate what they wanted but left the rest to rot since the 20 cents a kilo wasn't worth the effort.
Even better, if local companies in places like the Philippines can capture the value of processing coconuts for their milk and oil than more jobs are generated. For farmers it is better to sell for foreigner for high prices and generate higher income than to sell at low prices in the domestic market. That's as true for dairy producers in the west benefiting from higher Asian demand for cheese as it is for mango growers in Taiwan.
Elements of this article, such as the suggestion that tourism development in Sri Lanka would lead to a food security 'disaster', seemed reminiscent of 'noble savage' romanticism. The thing about food security is you get it by eliminating poverty and increasing economic development, not by making sure everyone remains a subsistence farmer.
Oscar - But most local consumers are not also local producers. Therefore more local people tend to lose rather than gain on the deal. They also lose substitutes as more and more land is devoted to the export crop.
Sure, economic development and diversification is a way to equalise locals' buying power, but what do they eat while waiting for the economic miracle?
This is what you get when most locals don't have either access to the means of food production or any buying power relative to external markets.
Even better, if local companies in places like the Philippines can capture the value of processing coconuts for their milk and oil than more jobs are generated. For farmers it is better to sell for foreigner for high prices and generate higher income than to sell at low prices in the domestic market. That's as true for dairy producers in the west benefiting from higher Asian demand for cheese as it is for mango growers in Taiwan.
Local Consumers, Food Security and Economic Miracle
Amanda - Presenting this increase in prices as an unalloyed negative for countries that produce them is ridiculous. Yes, prices might go up for local consumers (many of whom may well also be producers) but rising prices also boosts export incomes and tax revenues. And it is not as if there are not local substitutes for these items.Oscar - But most local consumers are not also local producers. Therefore more local people tend to lose rather than gain on the deal. They also lose substitutes as more and more land is devoted to the export crop.
Sure, economic development and diversification is a way to equalise locals' buying power, but what do they eat while waiting for the economic miracle?
This is what you get when most locals don't have either access to the means of food production or any buying power relative to external markets.